For what purpose can the loan from Casa De Corazon's affiliate be used?
Casa_De_Corazon Franchise · 2025 FDDAnswer from 2025 FDD Document
tend to sell, assign or discount to a third party the financing discussed below.
Financing Offered
Our affiliate may offer to provide select franchisees financing assistance in the acquisition of their Casa de Corazon franchise and development of their Center. Whether it provides this assistance will depend on various factors including whether and to what extent there are funds for this purpose, whether the franchisee is in a market which we deem to be a target market, our strategy for growth, the creditworthiness of the candidate and various other factors. Our affiliate may offer to loan $100,000 to $200,000 for use solely in connection with the development of your Center. You will need additional funds for the development of your Center.
The interest rate will be the then-current prime rate of interest as published by the Wall Street Journal, as adjusted annually. (Promissory Note.) Payments will be made in 71 equal installments. (Promissory Note.) The amount of your loan payments will depend on the amount financed and the interest rate. You may prepay the loan without penalty. (Promissory Note.) Partial prepayments will not affect your obligation to pay future scheduled payments at the time and in the amount due until the Promissory Note is paid in full. (Promissory Note.) You will be required to waive presentment, demand for payment, notice of dishonor, notice of protest, protest, and all other notices or demands in connection with the Promissory Note. (Promissory Note.) If you default under any of the financing documents, and do not cure the default within 30
Source: Item 10 — FINANCING (FDD pages 22–23)
What This Means (2025 FDD)
According to Casa De Corazon's 2025 Franchise Disclosure Document, an affiliate may offer financing assistance to select franchisees for the acquisition of their franchise and the development of their center. The loan amount can range from $100,000 to $200,000 and is specifically designated for use in connection with the development of the Casa De Corazon center. However, the FDD stipulates that franchisees will need additional funds beyond this loan for the complete development of their center. The availability of this financing depends on factors such as the availability of funds, the franchisee's target market, Casa De Corazon's growth strategy, and the franchisee's creditworthiness.
The interest rate on the loan will be the then-current prime rate as published by the Wall Street Journal, adjusted annually. Repayment is structured in 71 equal installments, with the exact payment amount depending on the loan amount and interest rate. Franchisees have the option to prepay the loan without incurring any penalties. However, partial prepayments will not change the obligation to make future scheduled payments until the loan is paid off in full.
It's important to note that Casa De Corazon franchisees will be required to waive certain rights related to payment demands and notices. Defaulting on the financing documents and failing to cure the default within 30 days after notice can result in the termination of the Franchise Agreement. The loan is also subject to various conditions and requirements, including granting a security interest in the franchisee's assets and those of any subsidiary, and potentially granting a mortgage on the real property where the center is located. The security interest and mortgage will be junior and subordinate to any pre-existing SBA loan.